newburgh, NY · Member since 2016 · 14 posts · 0 votes
Hello everyone. How does one get started with out of state investing with smaller properties? Often you hear that you need 40-50 units to cover the cost of property management. What if you don't want that many units?
How does someone get started with out of state investing with a simple triplex or fourplex?
I have been investing out of state for years now and when I started out, it was small deals with great cash flow. It is a myth when people say you need to buy large. Do your due diligence and have a team set up in whatever state you ultimately choose. Investing out of state is not black and white; there are variables that you have to make sure are accounted for since you will not be nearby.
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
8y
Daniel Alva
Many people own 1-4 unit properties out of state, myself included. You have to budget correctly for expenses and property management.
This works better if the properties cash flow well.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
you don't need that many... you just need to buy smart. MFH isn't always the best although it's extremely popular on here. Buy a property that makes sense... based on numbers.
I have been investing out of state for years now and when I started out, it was small deals with great cash flow. It is a myth when people say you need to buy large. Do your due diligence and have a team set up in whatever state you ultimately choose. Investing out of state is not black and white; there are variables that you have to make sure are accounted for since you will not be nearby.
Rental Property Investor · Sacramento, CA · Member since 2015 · 1k+ posts · 893 votes
8y
Hey Daniel,
You can still cash flow on small properties, even with financing. Just avoid D-class single family homes due to low property value. If you have a great property manager you could probably swing 4 units D-class and do just fine.
For a new out-of-state investor buying an SFR I think the sweet spot is $1000 rents on a 75k property in good condition and a C neighborhood.
If you want to get started with 3/4 units you can either buy one that's occupied and doesn't need a ton of work with financing, which is pretty cool. Just find a good property manager and get to it! My property manager is awesome- as a result I get to live in CA and never see my properties, buy stuff at discount prices, and I've got someone that keeps my C class properties paid on time month in and month out!